Biofuels and airlines

Biofuels could be used to fly commercial airlines within the next decade as a
viable alternative to kerosene, although costs and concerns over environmental
impact remain big barriers.

Airlines including Virgin Atlantic, Continental, Air New Zealand and Japan Airlines
have already flown on routes with one engine part-powered by a range of biofuels
including algae and jatropha.

Jatropha, a poisonous plant that produces seeds that can be refined into biofuels,
is being touted as a good alternative fuel and a potentially powerful weapon against
climate change.

Experts say the perennial plant can grow on marginal land with limited rainfall,
and does not compete with other food crops or encourage deforestation.

Following its flight using jatropha in late December, Air New Zealand has set
a goal to have 10 percent of fuel coming from biofuel sources by 2013, while Virgin
is aiming for 5 percent by 2015.

But Captain David Morgan, Air New Zealand’s chief pilot, said bio-jet fuels had
three major obstacles to overcome before regular use in aircraft engines.

“The fuel source has to be environmentally sustainable and not compete with existing
food resources, it has to be a drop-in replacement for traditional jet fuel, and
it needs to be cost competitive with existing fuel supplies and be readily available,”
he said.

SLASH AND BURN

Although the jatropha industry could create millions of jobs in the poorest countries
in Africa and Asia, some warn more research is needed into the economic, social
and environmental impacts of jatropha before production is ramped up.

“If you divert land from food production for jatropha, then you reduce the amount
of food on the market… On the other hand, you might increase local income to
buy food. The impact is not that clear cut,” Jean-Philippe Denruyter, a director
at environmental group WWF, said.

Indigenous leaders from the Philippine island of Mindanao warned in December
that 500 hectares of jatropha had already displaced food crops such as rice, corn
and bananas.

Deforestation for palm oil crops, which can also be refined into biofuel, has
also triggered vast fires through slash-and-burn farming in Indonesia.

“All of the airlines have very strict sustainability criteria, one of them being
no deforestation,” said Sanjay Pingle, president of Terasol Energy, the firm that
provided the biofuels for the Continental, Air New Zealand and Japan flights.

“All of the jatropha sourced for these flights came from marginal land not suitable
for food production, that had no significant indigenous growth on it for at least
20 years.”

Scientists say deforestation accounts for a fifth of global greenhouse gas emissions,
while aviation makes up 2-4 percent.

OIL MOVES

Through a joint venture with BP, London-based biofuel company D1 Oils has planted
over 250,000 hectares of jatropha, or around a quarter of the current world supply.

D1-BP Fuel Crops expects to plant 1 million hectares over the next four years,
but D1 Oils’ Graham Prince said most seeds are currently being replanted instead
of being crushed for oil.

“There’s actually relatively little jatropha oil around at the moment,” he said.

Falling crude oil prices also mean jatropha may not be able to compete on price,
which could lead to a slow down in production.

Crude oil traded at up to USD$147 a barrel last summer, making jatropha a bargain
alternative. But crude is now trading below USD$50 a barrel.

“If you look at jatropha’s cost of production, competing with crude oil and without
subsidies, you’re looking at between USD$50 to USD$80 a barrel,” Pingle said.

He added: “In our view, we’re at least five years away from being able to have
jatropha oil available on a regular basis in some sort of small blending level.”

Government funding is crucial if the fuel is to consistently compete with kerosene,
Andrew Herdman, director general of the Association of Asia Pacific Airlines,
said.

“(Biofuel) relies on subsidies for crops and refineries. Even with all the advantages,
it still struggles to compete on price,” he said.

He added that emissions targets were not industry specific, meaning aviation
could be snubbed and resources moved to cheaper sectors such as road transport
if it was deemed too expensive.

“The object is to reduce carbon emissions overall, not to reduce emissions in
every sector. There is an argument to direct biofuels to less onerous applications,”
he said.

But he concluded that obstacles could be overcome.

“We have to be realistic about timescales, but two or three years ago it looked
20 years away. Now, I think we are two or three years away (from commercial viability),”
he said.